Strong semiconductor & EDA revenue growth continues in Q4 2017

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Global semiconductor revenue hit another record high of $114.0 billion in Q4 2017, demonstrating strong and consistent growth of 22.5% vs. Q4 2016 (SIA), following 22.2% growth in Q3 2017 and 23.7% growth in Q2 2017, with 21.6% 2017 full year growth to $412 Billion. Gartner is forecasting further healthy growth in semiconductor revenue for 2018 to $451 billion.
As regards the two major EDA suppliers, Synopsys is emulating the strong semiconductor growth, growing revenues by 17.9% Q4* 2017 vs Q4* 2016, while Cadence continues to grow revenues more slowly, reporting 7.0% growth:

For comparison, the % growth rates in the previous quarter, Q3* 2017 versus Q3* 2016 were Synopsys 9.9%, Cadence 8.8%, ESD Alliance 8.0% and semiconductor 22.2%.
Examining the delta in revenue growth in dollars, Synopsys and Cadence’s Q4* 2017 vs Q4* 2016 revenues increased by $116.6M and $32.7M respectively. Synopsys and Cadence both surpassed their previous mid-point revenue guidance for the quarter, Synopsys by $17M and Cadence by $6.7M:

Guidance for the next quarter

The EDA companies’ own guidance (mid-point) for Q1* 2018 equates to percentage revenue growth as follows: Synopsys: 14.3% ($97.4M growth to $777.5M); Cadence 5.9% growth ($28.1M growth to $505M), as Synopsys continues to forecast growth at more than double the percentage growth rate of Cadence:

In summary, Q4 2017 global semiconductor revenue grew by 22.5% to a yet another record high of $114 Billion, while Synopsys revenues grew by 17.9% and Cadence by 7.0%. The EDA companies own guidance for Q4* 2017 is for Synopsys to grow revenues by 14.3% and Cadence by 5.9%.
The author, Gerry Byrne is the founder of edalics, the only independent EDA Budget Management advisor to leading semiconductor companies. Gerry Byrne will be at DAC in San Francisco from June 24 to 28 and also in San Jose from June 20 to 22. If you wish to discuss any opportunity or just discuss the latest EDA news, simply email to schedule a meeting.
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* Based on each company’s reported financial quarterly data which most closely match that calendar quarter.

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